Labour launches renationalisation assault

Published: February 11, 2018 Last modified: February 11, 2018

Labour’s big guns have put re-nationalisation of public services firmly back at the top of the political agenda.

Leader Jeremy Corbyn said that the questions of ownership and control “go right to the heart of what is needed to create a different kind of society.”

And Shadow Chancellor John McDonnell said that Labour’s proposal to bring services such as water, energy and rail into public ownership would be “cost free”,

Corbyn said: “It cannot be right, economically effective, or socially just that profits extracted from vital public services are used to line the pockets of shareholders when they could and should be reinvested in those services or used to reduce consumer bills.

“We know that those services will be better run when they are directly accountable to the public in the hands of the workforce responsible for their front line delivery and of the people who use and rely on them. It is those people not share price speculators who are the real experts.

“That’s why, at last year’s general election, we pledged to bring energy, rail, water, and mail into public ownership and to put democratic management at the heart of how those industries are run. This is not a return to the 20th century model of nationalisation but a catapult into 21st century public ownership.”

He said that the failure of privatisation and outsourcing of public services could not be clearer: “From Carillion’s collapse and the private sector’s chronic inability to run the East Coast Mainline to the exorbitant costs of PFI and the hopeless inability of G4S even to handle basic security at the London Olympics the same story is repeated again and again; costly, inefficient, secretive.

“Unaccountable corporate featherbedding, lubricated by revolving door appointments between Whitehall, Westminster and private boardrooms as service standards and the pay and conditions of public service workers are driven down. This obsessive drive to outsource and privatise has been tried and tested to destruction.

“Carillion’s meltdown is a watershed moment. We need to take a new direction with a genuinely mixed economy fit for the 21st century that meets the demands of cutting edge technological change. Public services that reflect today’s society and the industries of the future.

“We need to put Britain at the forefront of the wave of international change in favour of public, democratic ownership and control of our services and utilities.

From India to Canada, countries across the world are waking up to the fact that privatisation has failed and are taking back control of their public services.”

Earlier, McDonnell said he wants to put public services “irreversibly in the hands of workers” so they can “never again be taken away”.

McDonnell insisted that taking services into public ownership would not ultimately increase the burden on taxpayers because government bonds could be swapped for shares in a revenue-producing company.

“It would be cost free. You borrow to buy an asset and when that asset is producing profits like the water industry does, that will cover your borrowing cost,” he said.

The Shadow Cabinet dismissed a report by the Social Market Foundation, commissioned by a group of water companies, which estimated that up-front costsof renationalisation would be £90 billion.

McDonnell said utilities could be managed more efficiently under public ownership, because they would no longer have to fund dividends for shareholders. “They’ve given out £18bn of dividends to their shareholders – sometimes they’ve actually given out more in dividends than they’ve made in profits,” he said.

“We aren’t going to take back control of these industries in order to put them into the hands of a remote bureaucracy, but to put them into the hands of all of you – so that they can never again be taken away. Public ownership is not just a political decision, it’s an economic necessity.”

The CBI said Labour’s calls for nationalisation would “wind the clock back on our economy”.